National Consumer Disputes Redressal
National Insurance Co. Ltd. vs Jai Prakash Gupta on 14 July, 2005
Equivalent citations: I(2006)CPJ151(NC)
ORDER
Rajyalakshmi Rao, Member
1. The present revision petition is filed against the order of the State Commission, Madhya Pradesh, dated 23.3.1999 in Appeal No. 363 / 95, whereby the State Commission has allowed the appeal filed by the respondent/ complainant against the order dated 28.3.1995 of the District Forum, Bhopal, in Complaint No. 590/93 and thereby has enhanced the amount from Rs. 46,980 awarded by the District Forum to Rs. 1,25,000. Brief facts of the case are:
2. The respondent/complainant, Shri Jai Prakash Gupta, had insured the shop under the name of M/s. Gwalior Tobacco Stores, Bhopal, under the shopkeeper's insurance policy for a period 4.12.1992 to3.12.1993 from the petitioner, National Insurance Company. The sum insured under the policy towards the stock consisting of Beetal nuts, Bidi, Match Box and Pan Masala was Rs. 1,00,000 and Rs. 25,000 for furniture and fixtures. This insurance of total Rs. 1,25,000 was taken against theft, fire and not, etc.
3. On 6.12.1992 riots broke out all over India because of demolition of Babri Masjid and a curfew was imposed in Bhopal from 7.12.1992 to 12.12.1992. The respondent could not go to his shop till 12.12.1992 because of the curfew in that area and when the respondent reached his shop on 13.12.1992 he found that his shop was completely looted and the furniture was brought out and set on fire. On the same day the matter was reported to the police and a claim for total loss was made to the Insurance Company. During the investigation of the claim, the complainant submitted the duplicate bills of purchase of the goods.
4. It is the contention of the petitioner that the indemnity of the insurer is to pay for the loss which in fact has been suffered by the insured in the incident of rioting and not for the entire amount insured under the policy. The second contention of the petitioner is that the Surveyor had asked the insured to produce the records in respect of stocks/accounts for any period to assess the loss on the basis of the trend of business and to assess the actual loss. The petitioner alleged that the Surveyors were not allowed to make proper inspections in order to prepare the inventory of stocks. The letters by the Surveyor asking for relevant information and the respondent's non-compliance of the same is non-cooperation of the respondent. The delay in giving the Surveyor's report is only due to considerable delay in furnishing the records by the respondent. It is also alleged that in absence of the books on accounts for the pre-riot period and the fact that the duplicate bills so produced were not duly authenticated, the Surveyor had to evolve some procedure to assess the loss payable under the policy. The learned Counsel for the petitioner further argued that the Surveyor was informed that the sale and purchase of the insured trade remained constant and accordingly the Surveyor assessed the loss on the basis of trend of sale and purchase immediately after the post-riot period. He had assessed the loss towards the value of the stock at Rs. 41,630 and deducting the salvage value of Rs. 1,500 assessed the lose payable at Rs. 40,130. Further he had assessed the loss towards the furniture, fixtures, etc. at Rs. 6,850 and thus the total loss was assessed at Rs. 46,980. This has been accepted by the District Forum in toto and that interest @ 15% should be paid on this amount from 12.12.1992 till the date of payment and further directed the respondent to approach the Civil Court for arbitration for the remaining claim. The petitioner further alleged that the order of the State Commission has allowed the entire insured value, i.e., Rs. 1,25,000 without appreciating the principles of insurance and assessment made by the Surveyor. It is contended that the State Commission failed to appreciate that as per provision of Section 64 of the Insurance Act, Insurance Company has to appoint Surveyors to assess the loss and based on their recommendations, final decision is to be taken by the company which they have done and hence there is no infirmity or deficiency of service or negligence on their part. It is also alleged that the State Commission has erred in observing the report of the Surveyor cannot be relied upon and that the Insurance Company had not applied their mind before rejecting the claim of balance amount of the insured. The State Commission merely accepted the fact that the policy was insured for Rs. 1,25,000 and discounted the Surveyor's report without efficient evidence to establish the loss of Rs. 1,25,000.
5. We have carefully gone through the records and heard the arguments of the parties, it must be noted that the insurance policy for Rs. 1.25 lakh was taken on 4th December, 1992. On 7th December, i.e., within three days, there was massive rioting in Bhopal amongst many Dther places in India subsequent to the demolition of the Babri Masjid and the shop was completely looted, material was taken out und burnt outside the shop. Because of the :urf ew, the respondent whose insured property is a small pan shop could not go to the shop till 10th and 12th. On the 12th when he realized that he lost everything, he filed a police complaint and simultaneously informed the Insurance Company. Firstly, the Surveyor appointed by the Insurance Company took another 9 months to submit his survey report. The survey report recommended that the claim should be settled for a smaller amount of Rs. 46,980 on the ground that the respondents have not been able to prove the value of the stock on the day of the rioting and arson. This is a strange observation and shows lack of good faith and total lack of application of mind. The property was insured on 4th December and 5 th December happened to be a holiday. The only sale that could have taken place is on 6th December (one day) because the looting and arson took place on 7th December. Obviously, the respondent could not have sold Rs. 80,000 worth of goods in one day.
6. In his complaint before the District Forum, the complainant alleged that the agent of the Insurance Company and the Surveyor wanted some commissions to be paid and, therefore, requested that the Surveyor should be produced for cross-examination. In the stated circumstances, it should have been permitted by the District Forum which was not done. Another reason for giving only partial relief is that respondent did not produce the original bills of purchase. When the respondent was claiming that the entire contents of the shop including the accounts books were burnt by the moosters, mere was no logic in insisting on tne original records. At the Instance of the Surveyor, the small trader seems to have produced some duplicate purchase vouchers with great difficulty. These were promptly rejected by the Surveyor saying that these could not be relied upon. This in fact is a strange argument and again showed mala fides.
7. Thirdly, the Surveyor has adopted the strange policy of the quantum of post-riot sale to arrive at the stock of the goods in the shop. The principle of post-riot sale is not at all relevant and in fact would be totally wrong to arrive at the sales and purchases that would have taken place prior to the riots. Obviously, one of the two following things must have happened; either the Insurance Company blindly issued the insurance policy up to Rs. 1.25 lacs three days before the riots without actually verifying the stock in the shop or it has adopted a perverse logic without application of mind to reject the respondent's legitimate claim.
8. This Commission in two other cases has condemned this type of practice followed by the Insurance Companies. These are United India Insurance Company Ltd. v. Shri Hasan Sultan, III (1992) CPJ 64 (NC) : 1986-1996 Consumer 1772 (NS); Rajkamal and Company Ltd. v. United India Insurance Company Ltd. I (1992) CPJ 121. The first case dealt with the matter where the Insurance Company issued a policy without verifying the fact of insurable interest and second one dealt with the case where the Surveyor submitted a wrong report without proper, fair and thorough investigation and Insurance Company repudiated the claim without applying their mind.
9. In view of the above, we see no merit whatsoever in the revision petition which is dismissed with cost of Rs. 5,000 to the respondent to be paid within four weeks from the date of the order.